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Outer continental shelf development and the North Carolina coast: a guide for local planners

The transportation of raw materials, fuel, equipment, parts, and workers
requires rail and highway access to the yard. Access to an airport facili-tates
the shipment of small freight and out-of-town personnel. The level of
traffic will vary with the number of platforms being constructed at one time
and can be intense, especially in a small community, since up to 550 workers
may be needed for each platform (NERBC, Factbook , p. 8.2.). It is difficult
to obtain specific information on the transportation requirements of a fabri-cation
yard until offshore oil or gas discoveries determine the demand for
platforms and the yard begins operation.
Except when all other locational factors are equal, the availability of
skilled labor is not critical in the site selection decision, even though a
fabrication yard employs hundreds of steel workers. The company may bring in
skilled workers and management staff from Gulf coast yards to provide a nu-cleus
of workers who understand the platform fabrication process and can train
local workers.
The most important considerations in determining whether or not to con-struct
a new steel platform fabrication yard in a frontier region are
(1) the size of the offshore find, which determines the level and timing of
the demand for platforms, (2) the portion of the platform market that the
fabricator believes it can capture, (3) the distance from the offshore field
to existing fabrication yards, and (4) the capital and operating costs of a
new yard.
Though land for a new yard may be purchased or optioned years before a
lease sale, a fabrication company will construct the facility only after a
significant offshore find has occurred and oil companies formulate schedules
for field development . While the oil company delineates the extent of an
offshore field, the fabricator meets with oil company representatives to dis-cuss
the number of platforms needed, preliminary specifications for platform
design, and a platform delivery schedule.
Having a fabrication yard ready for production soon after the discovery
of an offshore field allows the fabricator to compete effectively against
other firms and allows offshore operators to more quickly begin oil and gas
production. The strategies of fabricators and oil companies are not always
compatible. The fabricator wants to avoid facility construction and other
major investments in a new yard until it receives an initial order for plat-forms.
The oil company benefits from having the yard fully developed when
it places the initial order, thus avoiding costly delays in offshore produc-tion.
There is no consensus on what constitutes enough of a market for plat-forms
to justify building a new platform fabrication yard. Investment poli-cies
vary from one fabrication company to the next. After determining what
portion of the platform market it can capture in a frontier region, the fabri-cation
company will compare the initial capital costs and operating costs of
a new yard with the cost of building the platforms at an existing yard and
towing them to the offshore field. The outcome of this balancing decision
79

The transportation of raw materials, fuel, equipment, parts, and workers
requires rail and highway access to the yard. Access to an airport facili-tates
the shipment of small freight and out-of-town personnel. The level of
traffic will vary with the number of platforms being constructed at one time
and can be intense, especially in a small community, since up to 550 workers
may be needed for each platform (NERBC, Factbook , p. 8.2.). It is difficult
to obtain specific information on the transportation requirements of a fabri-cation
yard until offshore oil or gas discoveries determine the demand for
platforms and the yard begins operation.
Except when all other locational factors are equal, the availability of
skilled labor is not critical in the site selection decision, even though a
fabrication yard employs hundreds of steel workers. The company may bring in
skilled workers and management staff from Gulf coast yards to provide a nu-cleus
of workers who understand the platform fabrication process and can train
local workers.
The most important considerations in determining whether or not to con-struct
a new steel platform fabrication yard in a frontier region are
(1) the size of the offshore find, which determines the level and timing of
the demand for platforms, (2) the portion of the platform market that the
fabricator believes it can capture, (3) the distance from the offshore field
to existing fabrication yards, and (4) the capital and operating costs of a
new yard.
Though land for a new yard may be purchased or optioned years before a
lease sale, a fabrication company will construct the facility only after a
significant offshore find has occurred and oil companies formulate schedules
for field development . While the oil company delineates the extent of an
offshore field, the fabricator meets with oil company representatives to dis-cuss
the number of platforms needed, preliminary specifications for platform
design, and a platform delivery schedule.
Having a fabrication yard ready for production soon after the discovery
of an offshore field allows the fabricator to compete effectively against
other firms and allows offshore operators to more quickly begin oil and gas
production. The strategies of fabricators and oil companies are not always
compatible. The fabricator wants to avoid facility construction and other
major investments in a new yard until it receives an initial order for plat-forms.
The oil company benefits from having the yard fully developed when
it places the initial order, thus avoiding costly delays in offshore produc-tion.
There is no consensus on what constitutes enough of a market for plat-forms
to justify building a new platform fabrication yard. Investment poli-cies
vary from one fabrication company to the next. After determining what
portion of the platform market it can capture in a frontier region, the fabri-cation
company will compare the initial capital costs and operating costs of
a new yard with the cost of building the platforms at an existing yard and
towing them to the offshore field. The outcome of this balancing decision
79